Document of The World Bankdocuments.worldbank.org/curated/en/845791468060878211/pdf/ICR681… ·...

Document of The World Bank

Report No: ICR0000681

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-34640 IDA-3464A)

ON A

SPECIFIC INVESTMENT CREDIT

IN THE AMOUNT OF SDR 58.80 MILLION {US$75.00 MILLION EQUIVALENT}

TO THE

REPUBLIC OF NICARAGUA

FOR THE

THIRD ROAD REHABILITATION AND MAINTENANCE PROJECT

December 20, 2007

Sustainable Development Sector Management Unit Central America Country Management Unit Latin America and the Caribbean Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective November 1, 2000)

Currency Unit = Cordoba C$ C$1.00 = US$0.08 US$1.00 = C$12.4

FISCAL YEAR [January 1 – December 31]

ABBREVIATIONS AND ACRONYMS

ADT Average Daily Traffic BM World Bank (Banco Mundial) BCIE Central American Bank for Economic Integration CAS Country Assistance Strategy COERCO Regional Road Maintenance Agencies

(Corporación de Empresas Regionales de Construcción) DANIDA Danish International Development Agency DGV Highways Department (Dirección General de Vialidad) DR-CAFTA Dominican Republic–Central American Free Trade Agreement FOMAV Road Maintenance Fund (Fondo de Mantenimiento Vial) GON Government of Nicaragua HDM Highway Design and Maintenance Model HIPC Highly Indebted Poor Countries IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report IDA International Development Association IDB Inter-American Development Bank IEG Independent Evaluation Group IERR Internal Economic Rate of Return IRI International Road Roughness Index ISN Interim Strategy Note M&E Monitoring and evaluation MARENA Ministry of Environment and Natural Resources MCA Community Road Work Group

(Módulos Comunitarios de Adoquinado) MCC Millennium Challenge Corporation MDGs Millennium Development Goals MOF Ministry of Finance MTI Ministry of Transport and Infrastructure NDP National Development Plan NMT Non-motorized Transport NPV Net Present Value PDOs Project Development Objectives PEA Rural Roads Stabilization Program PMS Pavement Management System PND National Development Plan (Plan Nacional de Desarrollo)

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PNT Nacional Transportation Plan (Plan Nacional de Transporte) PRSC Poverty Reduction Support Credit PRSP Poverty Reduction Strategy Paper RED Road Economic Decision Model RESA Regional Environmental and Social Analysis SIECA Central America Committee for Economic Integration

(Secretaría de Integración Económica Centroamericana) SIGFA Integrated Accounting and Auditing System

(Sistema Integrado de Gestión Administrativa y Auditoría) UCP Project Coordination Unit vpd Vehicles per day

Vice President: Pamela Cox Country Director: Makhtar Diop Sector Manager: Jose Luis Irigoyen Project Team Leader: Emmanuel A. James ICR Team Leader: Emmanuel A. James

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NICARAGUA

Third Road Rehabilitation and Maintenance Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives, and Design.............................................. 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 5 3. Assessment of Outcomes .......................................................................................... 10 4. Assessment of Risk to Development Outcome......................................................... 18 5. Assessment of Bank and Borrower Performance ..................................................... 18 6. Lessons Learned ....................................................................................................... 21 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 23 Annex 1. Project Costs and Financing.......................................................................... 24 Annex 2. Outputs by Component ................................................................................. 25 Annex 3. Economic and Financial Analysis................................................................. 28 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 31 Annex 5. Beneficiary Survey Results ........................................................................... 32 Annex 6. Stakeholder Workshop Report and Results................................................... 32 Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR .................... 33 Annex 8. Comments of Cofinanciers and other Partners/Stakeholders........................ 41 Annex 9. List of Supporting Documents ...................................................................... 44

Map IBRD 31207

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A. Basic Information Country: Nicaragua Project Name:

Third Road Rehabilitation and Maintenance Project

Project ID: P068673 L/C/TF Number(s): IDA-34640,IDA-3464AICR Date: 12/20/2007 ICR Type: Core ICR

Lending Instrument: SIL Borrower: GOVERNMENT OF NICARAGUA

Original Total Commitment:

XDR 58.8M Disbursed Amount: XDR 58.8M

Environmental Category: B Implementing Agencies: Ministry of Transport (MTI) Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 09/07/2000 Effectiveness: 08/31/2001 08/31/2001 Appraisal: 11/30/2000 Restructuring(s): Approval: 02/15/2001 Mid-term Review: 03/30/2003 Closing: 12/31/2005 06/30/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Highly Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Satisfactory Borrower Performance: Highly Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Highly Satisfactory

Overall Bank Performance: Satisfactory Overall Borrower

Performance: Highly Satisfactory

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C.3 Quality at Entry and Implementation Performance Indicators Implementation

Performance Indicators QAG Assessments (if any) Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Highly Satisfactory

D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Central government administration 9 9 Roads and highways 91 91

Theme Code (Primary/Secondary) Regional integration Primary Secondary Rural services and infrastructure Primary Primary E. Bank Staff

Positions At ICR At Approval Vice President: Pamela Cox David de Ferranti Country Director: Makhtar Diop D-M Dowsett-Coirolo Sector Manager: Jose Luis Irigoyen Jeffrey S. Gutman Project Team Leader: Emmanuel A. James Emmanuel A. James ICR Team Leader: Emmanuel A. James ICR Primary Author: Oswaldo Patino F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objectives of the Project are: (a) to improve the Borrower's transport infrastructure along selected international trunk road corridors; (b) to improve access to productive agricultural areas and to rural communities, in particular to those located in regions affected by Hurricane Mitch, the storm that devastated parts of Nicaragua in October 1998; and (c) to ensure the sustainability of the road improvements carried out under the Project.

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The performance indicators to measure the achievement of the project's objectives were: (a) reduction in vehicle operating costs and time savings along the key trunk road corridors linking Nicaragua and Honduras; (b) qualitative improvements to the network in terms of the kilometers of roads assessed as being in good or fair condition; (c) extent of the participation of the private sector in road rehabilitation and maintenance programs as measured in terms of the numbers and value of contracts awarded; (d) share of the budget allocated for road maintenance; and (e) number of rural communities provided with improved road access. Revised Project Development Objectives (as approved by original approving authority) There were no revisions to the project development objectives or to project key indicators. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Reduction in vehicle operating costs along key trunk corridors. Value quantitative or Qualitative)

IRI = 7 and 10 IRI = 2 IRI = 2

Date achieved 12/18/2000 12/31/2005 10/24/2006 Comments (incl. % achievement)

The target value was reached.

Indicator 2 : Share of road network assessed as being in good or fair condition (measured by IRI).

Value quantitative or Qualitative)

12% 17% 18%


MTI has improved the condition of its road network under the project.

Indicator 3 : Number of private sector contracts awarded in road rehabilitation and maintenance programs.

Value quantitative or Qualitative)

5 12 20


The number of contracts achieved with private sector has more than doubled during project implementation.

Indicator 4 : Share of budget allocated to periodic maintenance. Value quantitative or 12% 18% 20%

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Qualitative) Date achieved 12/18/2000 12/31/2005 12/31/2006 Comments (incl. % achievement)

Satisfactorily achieved.

Indicator 5 : Number of rural communities in Region 1 provided with improved road access. Value quantitative or Qualitative)

10 30 35


100%

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : About 150km of trunk roads rehabilitated.

Value (quantitative or Qualitative)

Rehabilitation of Managua-Izapa (60km) Muhan-El Rama (90km)

150 km Values were not revised 152.9 km

Date achieved 12/18/2000 12/15/2003 12/15/2003 12/15/2003 Comments (incl. % achievement)

100%

Indicator 2 : About 300 km of secondary and tertiary roads improved. Value (quantitative or Qualitative)

0 300km Values were not revised 287km


An additional 19.3 km were completed by MTI with other resources.

Indicator 3 : Job opportunities generated by the Rural Transport Improvement Program. Value (quantitative or Qualitative)

0 6,000 Values were not revised. 7,960


Based on MTI estimates for direct and indirect employment.

Indicator 4 : Number of microenterprises participating in the Road Network Maintenance Program.

Value 24 28 Values were 33

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(quantitative or Qualitative)

not revised.


The microenterprises are carrying out 2164 km of routine maintenance.

Indicator 5 : About 500 skilled and unskilled people employed for road maintenance by contract.

Value (quantitative or Qualitative)

350 500 Values were not revised. 411


This total includes only year-round contracts for routine maintenance. About 150 more people were hired for shorter-duration contracts for periodic maintenance.

Indicator 6 : Training workshops executed. Value (quantitative or Qualitative)

0 70 events Vales were not revised. 100 events


The value achieved included 68 local events and 32 events abroad.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 03/31/2001 Satisfactory Satisfactory 0.00 2 07/06/2001 Satisfactory Satisfactory 0.00 3 11/30/2001 Satisfactory Satisfactory 2.00 4 05/31/2002 Satisfactory Satisfactory 4.13 5 11/27/2002 Satisfactory Satisfactory 11.48 6 05/23/2003 Satisfactory Satisfactory 33.34 7 11/26/2003 Satisfactory Satisfactory 43.83 8 03/10/2004 Satisfactory Satisfactory 55.09 9 10/05/2004 Satisfactory Satisfactory 63.86

10 05/04/2005 Satisfactory Satisfactory 75.20 11 05/31/2006 Highly Satisfactory Highly Satisfactory 83.05 12 12/01/2006 Highly Satisfactory Highly Satisfactory 83.05 13 06/26/2007 Highly Satisfactory Highly Satisfactory 83.05

H. Restructuring (if any) Not Applicable

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I. Disbursement Profile

1. Project Context, Development Objectives, and Design

1.1 Context at Appraisal

At project appraisal, Nicaragua’s total road network comprised almost 19,036 kilometers (km), of which only about 10 percent were asphalt-paved primary roads, while the vast majority (90 percent of the total network) consisted largely of rural secondary or tertiary roads and unclassified gravel or earth surface roads. Traffic levels varied widely but were generally in excess of 2,000 vehicles per day (vpd) on the primary roads and upward of 150 vpd on the gravel roads. The network’s density (14 km/000 km2) and service index (0.4 km/000 pop.), in terms of paved roads, were among the lowest in Central America. In terms of population, a little over one-fifth (22 percent) of Nicaraguan households had access to paved roads. At that time, according to the Ministry of Transportation and Infrastructure (MTI), more than 75 percent of the total road network was in poor condition, including extensive segments of the north-south trunk road (Corredor Natural) between the Honduran and Costa Rican borders, and the east-west road linking Managua to the port of El Rama. This situation resulted from the difficult economic climate faced by Nicaragua in the 1990s and the lack of investments coupled with an inadequate maintenance regime that had, in turn, resulted in accelerated road deterioration. As a result, the poor condition of infrastructure, particularly in rural areas, was a major impediment to supporting the recovery of the economy. The devastation caused by Hurricane Mitch in October 1998 further worsened the economic climate of the country, by adversely affecting over 850,000 people and causing some 2,800 deaths. From a sectoral point of view, the more significant damages that produced lasting effects on the economy were concentrated on infrastructure, particularly the road network, and on agricultural production. In the road subsector, Hurricane Mitch caused severe damage to about 2,600 km of the network, including the literal shredding of most gravel roads in Region I (the Segovias) and Region II (Leon/Chinandega), and the partial or total destruction of 83 major bridges. The damage was so extensive that virtually all road transport services between Managua and the Honduran border were interrupted. Fortunately, the Government, with assistance from Donor countries, was able to restore basic traffic circulation in a few weeks; however, the bottleneck effects still lingered at the many roadside bypasses erected around damaged bridges and severed road sections. In sum, in terms of longitude but not necessarily location, Hurricane Mitch more than neutralized all of the road improvement gains made during the 1990s. However, the qualitatively better portions of the network fared reasonably well and it was estimated that, after the basic cleaning up and repairs carried out under the Emergency Programs of the various Donors, about 16 percent of the total road network could be considered to be in good or fair condition.

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In this context, the Government of Nicaragua (GON) developed a strategy based on a market-oriented economy that is open and competitive internationally, to ensure sustained economic growth. In order to achieve this goal, the Nicaraguan economy required appropriate levels of transport infrastructure investments together with an efficient delivery of transport services. Thus, a road improvement plan for 1999–2004 was formulated to address issues such as the rehabilitation and maintenance of key segments of the road network, the restoration to good condition of the trunk or primary asphalt-paved roads, the stabilization of rural (secondary and tertiary) roads, bridge rehabilitation, periodic maintenance by contract, and strengthening of MTI planning and programming capacities. Consistent with this plan, the Third International Development Association (IDA)-financed Road Project was designed to focus on the road rehabilitation and maintenance backlog, institutional development, and training needs. The project’s goal was to support the economic recovery of the country as a whole through investments in the trunk corridors, especially those located in regions damaged by Hurricane Mitch. The Third roads project marked the continuation of a series of IDA-funded projects in the road subsector and was consistent with IDA’s Country Assistance Strategy (CAS Report No. 17496 of April 9, 1998) and the Government’s transport priorities, and with the strategies of the other donors.

1.2 Original Project Development Objectives (PDOs) and Key Indicators The objectives of the Project were: (a) to improve the Borrower’s transport infrastructure along selected international trunk road corridors; (b) to improve access to productive agricultural areas and to rural communities, in particular to those located in regions affected by Hurricane Mitch, the storm that affected Nicaragua in October 1998; and (c) to ensure the sustainability of the road improvements carried out under the project. The performance indicators used to measure the achievement of the project’s objectives were: (a) reduction in vehicle operating costs and time savings along the key trunk road corridors linking Nicaragua and Honduras; (b) qualitative improvements to the network in terms of the km of roads assessed in good or fair condition; (c) extent of the participation of the private sector in road rehabilitation and maintenance programs as measured in terms of the numbers and value of contracts awarded; (d) share of the budget allocated for road maintenance by contract; and (e) number of rural communities provided with improved road access.

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1.3 Revised PDOs (as approved by original approving authority) and Key Indicators, and Reasons/Justification

There were no revisions to the Project Development Objectives or to key project indicators.

1.4 Main Beneficiaries Several groups were expected to benefit from the improvement of road infrastructure in the country. The first was the country as a whole, and especially road users, through the elimination of road bottlenecks and the reduction of vehicle operating costs. Given Nicaragua’s central location, regional road transport services would also benefit, due especially to the improvements of the trunk roads in the key trade corridors. The second target group was the rural communities in Region I (Estelí, Madriz, and Nueva Segovia). These communities were the poorest in the country, and expected to benefit from the rural road investments by lowering the costs of agricultural production and by the reduction of dust hazard to their health. Target communities were also expected to benefit from direct and indirect employment opportunities provided during the execution of rehabilitation and maintenance works. During project preparation, fieldwork confirmed the priority of these areas based on economic criteria and the need to restore damaged roads. The third group was the unemployed people from the rural communities who would have also benefited from entrepreneurship training through the establishment and operation of additional maintenance microenterprises. The fourth group comprised the staffs of MTI and the Road Maintenance Fund (FOMAV) who were the beneficiaries of the technical assistance program that was intended to consolidate the institutional gains made under the previously executed projects, and to continue building their capacity for a better use of resources. Other actors expected to benefit from the project were (a) the adoquine (small octagonal cement block) fabrication industry and the entire local construction industry, (b) municipalities from the rural communities in Region I, and (c) local consultants working on the design and supervision of the rural road stabilization program.

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1.5 Original Components

The project comprised four major components: Component A: Road Rehabilitation and Improvement Program. This component included the rehabilitation and improvement of two main roads: the Managua-Izapa road (63 km), which represented the most trafficked section of the trunk road, linking Nicaragua to Honduras at Guasaule; and the Muhan-El Rama road (92 km), which formed the last link in the 290-km road from Managua due east to the river port at El Rama. The works consisted primarily of widening and rehabilitating the road along existing alignments, and provision of adequate drainage and road signs. Rehabilitation of these corridors would help reduce the costs of transporting both exports and imports while at the same time helping to increase the viability of the national port at El Rama. Component B: Rural Transport Improvement. This component financed the stabilization of about 300 km of rural secondary and tertiary roads, to gravel or adoquine standards, located mostly in the Hurricane Mitch-devastated Region I. The works were planned to be executed by private and small contractors who would restore the road sections to gravel or adoquine standards, all within the existing rights-of way. Participation of small local contractors was an important feature so as to provide growth opportunities for them. Component C: Road Network Maintenance. This component aimed at financing the implementation of routine and periodic maintenance of approximately 1,500 km of trunk, secondary, and/or tertiary roads. The subcomponents included financing for: (a) the continuation of the program for introducing periodic maintenance by contract; (b) the extension of the program for routine maintenance by microenterprises; and (c) partial support of the annual programs of the Road Maintenance Fund (FOMAV). Component D: Capacity Building. This component included the financing of engineering and technical studies, and technical assistance through the provision of consultants’ services, equipment, and training, as needed for: (a) monitoring the performance of the components of the Project, the management and supervision of civil work contracts, the design and implementation of training programs, technical audits, surveys of traffic origin and destination, transport sector reviews, the strengthening of MTI’s capacity for technical, social, and environmental analysis, and the preparation of the implementation completion report of the Project; (b) designs and supervision of the overall road program by consultants, and training for MTI’s staff and microenterprises as required, plus the training of FOMAV’s staff; (c) improving the planning and programming capacity of MTI; (d) implementation of a reforestation pilot project near Bluefields Town; and (e) financing of feasibility studies and detailed engineering.

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1.6 Revised Components The original project components were not revised. However, the Bank financing increased, in dollars terms, from US$75 million to US$83.3 million due to the appreciation of the SDR, during the implementation period. The net increase in financing was used mainly for the road stabilization component.

1.7 Other Significant Changes

During project implementation, there were some changes, as listed below: 1. In 2002, following the national elections and the transition from the Alemán

Administration to the Bolaños Administration, the country faced a difficult economic climate that led to budget cuts and a shortage of counterpart funds. At the government’s request, IDA agreed to mitigate this factor by increasing its disbursement share for civil works after 2002 to 86 percent of total cost. As a result, the Government’s contribution decreased from US$12.44 million projected at appraisal to about US$5.64 million. Due to this measure taken by the IDA, the project’s implementation was able to regain momentum.

2. The loan closing date, originally scheduled for December 31, 2005, was

extended three times, for a total of 18 months. The first extension was granted until June 8, 2006 on the basis of the earlier delays that occurred due to excessive and untimely rainfall, the difficult political and economic climate, and the periodic shortages of counterpart funds The second extension, granted until December 30, 2006, was agreed between the Government of Nicaragua (GON) and the Bank to permit the completion of civil works affected by the continued untimely rainfall. Finally, the loan closing date was extended to June 30, 2007 to permit the conclusion of studies and consulting services related to the Regional Environmental and Social Analysis (RESA) needed for the proposed Naciones Unidas-Bluefields road improvement. The improvement of this road may be a candidate for inclusion in a future IDA project.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design, and Quality at Entry The project’s design was generally sound. The project was based mainly on the

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Government’s transport priorities and on the experience and lessons learned under the First (CR 2871-NI) and Second (CR 3085-NI) road transport projects, which had both been executed in a highly satisfactorily manner. The Independent Evaluation Group (IEG) Project Performance Assessment Report No. 39868 of June 4, 2007 on the Second Road Rehabilitation and Maintenance Project confirmed this. Relevant factors related to the rebuilding of networks following periods of natural disasters or economic downturns faced by the country, when there would be an overriding desire to put resources on reconstruction only, were also taken into account in the design of specific components. Considering this, a key lesson that proved to be important was the need to design a balanced program focused on the sustainable development of the institutions that manage the sector and on the maintenance of infrastructure. Participatory processes were also identified and executed to ensure the project’s viability. Local people and municipal authorities were informed prior to the start-up of the project, and expressed their support of the proposed rural road improvements. Full commitment from the Borrower and ownership from the beneficiary population were essential to achieving outcomes in these aspects. Project design also complemented Bank poverty reduction strategies by focusing on one of the poorest regions of the country. The contracting of local community modules and microenterprises for road stabilization and maintenance works proved to be an important approach for the generation of job opportunities and the improvement of living standards in the communities. The project components were in line with the objectives, and the activities comprising each of them were realistic and vital to achievement of the desired development outcomes. Physical investments focused on rehabilitation and maintenance works, and were generally not overly complex for their design and implementation. The institutional strengthening component was designed mainly to improve MTI’s efficiency so as to ensure sustainability of its operations, but it also involved technical assistance and staff training activities for other sector actors, such as FOMAV and the microenterprises. These activities were needed in order to achieve the intended outcomes, but were to some extent dependent on the presence of a set of complementary conditions including a supportive institutional environment and availability of adequate capacity at various levels, together with a readiness to adjust to changing circumstances on the part of the Project Coordination Unit (UCP).

2.2 Implementation During the implementation stage, there were some keys factors that affected performance and, these are described below: Introduction of a new government financial system. The application of a new

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financial and accounting system in the public sector—the Sistema Integrado de Gestión Administrativa y Auditoría (SIGFA)—and Financial Law 550 introduced new demands and procedures for project accounting and administration, generating a somewhat longer payment cycle for contractors. This resulted in some delays. The IDA helped to organize an interministerial consulting group (MTI/Ministry of Finance/State Audit) which played a screening, prioritizing, and problem solving role that was instrumental in removing system bottlenecks. Shortage of Counterpart Funds. Project implementation was affected by the delays in the availability of counterpart funds to finance the civil works components. To overcome this problem, IDA increased its share of project cost financing from 86 percent to 94 percent, on average. Frequent turnover of the key staff. Overall staff turnover amounted to about 55 of the higher-level staff in MTI and the UCP dealing with the project. In terms of numbers of key staff changes, during project execution there were 2 Ministers and 4 Vice Ministers of MTI, 3 Directors of Highways, 2 Directors of Planning, and 2 engineers at the UCP. The potential negative effects of these frequent turnovers were offset by the training events that were implemented on a timely and continual basis at various levels of the MTI and UCP, and by IDA dialogue and missions focused on ensuring continuity of the program. Continuity of the Project Management Team. As part of the institutional and implementation setup, the MTI executed the Third project through the same UCP that had demonstrated an excellent performance with the two previous IDA- financed projects (CR.2871-NI and 3085-NI). In addition, due to the scale of the adoquine program, the UCP team was strengthened by two additional engineers. The experience and lessons learned by the UCP proved to be important in dealing with the implementation issues that arose continually and with those due to periodically arising emergencies such as earthquakes, droughts, and floods. On balance, the UCP staff showed a remarkable ability to adjust the project to face challenges due to adverse changes in the implementing environment, and also to effectively use and reprogram the resources available. The UCP was staffed by regular MTI personnel who were seconded to it and paid standard government salaries; it is fully integrated with the normal administrative functioning of the MTI. Strong and productive dialogue between the MTI staff, Bank team, and Donors. The quality of the dialogue among the client, the Bank, and the Donors allowed the UCP to overcome the difficulties that appeared during project implementation. Between the Bank and MTI teams, it was possible to adapt and reformulate strategies quickly and to respond to the changing realities such as frequent staff turnover or the shortage of counterpart funds.

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Fuel surcharge for the Road Maintenance Fund (FOMAV). The funding of road maintenance had long been a problem in Nicaragua but was gradually improving due to the steps taken under the previous IDA projects, especially the introduction of the FOMAV and the contracting of road maintenance to microenterprises and private contractors. At the time of preparation of the Third project, it was agreed that the Government would help to ensure the sustainability of the road program by securing the funding of FOMAV operations through a fuel surcharge. The Government in principle supported the adjustment and eventually managed to approve the legislation needed to create a reliable source of funding for road maintenance activities managed by the FOMAV. However, it took many years to achieve this change. The proposal was approved by Congress in December 2005, more than six years after the creation of FOMAV. During those previous years, the routine and periodic maintenance operations of FOMAV were supported by co-financing with the Inter-American Development Bank (IDB), IDA, the Danish International Development Agency (DANIDA), and other donors. As a result, FOMAV’s capacity improved considerably and by 2005 was in a position to manage the additional resources arising from the surcharge. Force majeure events. The rainy seasons in Nicaragua of approximately five to seven months delayed the completion of some civil works. It was due partly to the difficulties in the execution of civil works that were generated during these heavy rains that the Government requested two of the closing date extensions.

2.3 Monitoring and Evaluation Design, Implementation, and Utilization

Monitoring and Evaluation (M&E): Project implementation was measured against a list of physical and financial targets for road rehabilitation, periodic and routine road maintenance, and detailed institutional strengthening for MTI. The M&E targets were specifically linked to the project, and focused on the achievement of project outputs over given periods. The baseline data to monitor key transport indicators for MTI had been developed under the earlier IDA projects.

2.4 Safeguard and Fiduciary Compliance

Safeguards: Project preparation with regard to the safeguards aspects was carried out in accordance with World Bank Operational Directives and the environmental procedures established by the Ministry of Environment and Natural Resources (MARENA). MTI in coordination with MARENA was responsible for the environmental and social aspects of project preparation and implementation. The project was accorded Category B given that the rehabilitation works for the selected roads were along existing corridors and no significant negative impacts were expected. MARENA issued the environmental certification for the project. No safeguards compliance problems arose during project implementation.

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It is orthwhile noting that the project supported two major safeguard initiatives for (i) introducing social assessments and (ii) carrying out a reforestation pilot. First, starting from zero experience, the MTI has learned how to conduct social analyses under this project and has tried to mainstream their experience through the preparation of a Social Management Manual. This Manual covers resettlement, cultural property, indigenous people as well as other key elements of social impact assessment and mitigatory measures. Additionally, the manual outlined some of the key policies and strategies needed for building cooperation with the municipalities involved in order to pursue common or joint problem solving approaches. This was an exemplary achievement of the MTI. Second, in order to compensate for the indirect effects of road projects, the project financed the successful reforestation of 60 hectares of the Esconfran Basin, near Bluefields Town. The project also provided technical assistance to the 32 beneficiary families living in the reforested area. Fiduciary Aspects: Financial management of the project was carried out in accordance with the arrangements agreed upon in the legal agreements and operational manual. Also, the project had an acceptable financial system in place at the start-up due in part to the retention of accounting staff in the UCP from previous projects, providing experienced administration and management of the financial aspects. In general, it can be said that the financial management arrangements of the project were found to be satisfactory during project implementation. Procurement: Given the experience and institutional capacity within the UCP, the procurement of goods, works, and services under the project was carried out satisfactorily in accordance with IDA procurement procedures. The preparation of tender documents and procurement proceeded smoothly, and the record- keeping and filing systems were good. The UCP reported procurement information to the IDA frequently and issues that arose were addressed with support from the IDA procurement staff. In general, there were few delays in the procurement and payments process, other than due to factors such as counterpart funding not being readily available. The latter was solved by increasing the IDA share of financing.

2.5 Post-completion Operation/Next Phase Key trunk roads financed under the project are already in operation and maintained by FOMAV under its annual regular operations and investment plans. Rural roads financed under the adoquine road stabilization component are also being maintained by the road maintenance microenterprises. Moreover, IDA has worked with the Government and MTI to develop a National Development Plan (NDP), which among other things, highlighted the need for investments in critical productive infrastructure. The IDA’s Interim Strategy Note of August 4,

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2005 (ISN Report No. 32570-NI) endorsed the importance of continued government support for improving road infrastructure. IDA has since formulated and approved the Fourth Road Rehabilitation and Maintenance Project (CR 4185-NI) that is focused on sustainability of road maintenance and improving access by scaling-up the road stabilization program in rural areas. This program will help MTI complete another 320 km of the NDP’s target of improving 1,200 km of secondary and rural roads. The remainder will be attained via projects financed by the Central American Bank for Economic Integration (BCIE), IDB, the Millennium Challenge Corporation (MCC), and the GON. This follow-up operation is consistent with the Government’s transport sector strategy, government priorities, and the completed Third project.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design, and Implementation Relevance of the project objectives is rated high. The project objectives, as stated in the Project Appraisal Document (PAD), focused on addressing the priority areas that would go far in eliminating the road infrastructure constraints to economic growth, which were: (a) road rehabilitation and maintenance backlog, and (b) institutional development and training needs of the agencies responsible for managing the transport sector. These objectives were also responsive to the Borrower’s strategies for poverty reduction through growth and to the economic need for repairing transport infrastructure that was damaged by Hurricane Mitch. This was consistent with the Bank’s Country Assistance Strategy for Nicaragua. The objectives are still relevant because they are consistent and in line with the principles of the Highly Indebted Poor Countries (HIPC) initiative and the GON’s Poverty Reduction Strategy Paper (PRSP), since the deficiencies of road infrastructure constitute a limitation to economic growth. They are linked also to the achievement of other expected NDP key results, which include: (a) reaching an annual economic growth rate of 5 percent while sustaining macroeconomic stability, (b) reaching the Millennium Development Goals (MDGs) emphasizing extreme poverty reduction, (c) doubling the value of exports between 2004 and 2010, (d) improving the quality of 1,200 km of the secondary and rural road network, and (e) attracting additional foreign private investments exceeding US$100 million annually.

3.2 Achievement of Project Development Objectives (details on outputs in Annex 2)

The achievement of Project Development Objectives is rated highly satisfactory since virtually all of the intended project outcomes and outputs have been achieved. Project design and loan resources were focused primarily on the road improvements, ensuring sustainability of road maintenance, and continuing institution building. It must be borne in mind that this project was implemented

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during a particularly difficult economic and political period in Nicaragua. Still, the overall justification and sustainability of the road network improvement program seems to have finally been attained. The securing of sustainable funding for road maintenance and the full establishment of the FOMAV were landmark achievements; to some extent this was also true for the rural roads stabilization program. This marks the completion of a key long term goal for the IDA because there is now a sustainable source of financing for the maintenance of the rural and main roads being rehabilitated under the various MTI programs. It also helps guarantee the long term sustainability of the road maintenance by microenterprises program, which is now being managed by FOMAV. The Third Road Rehabilitation and Maintenance project thus became considered as the model performer for the IDA portfolio in Nicaragua and for the LAC Region as a whole. Based on these achievements, the project has been rated as overall highly satisfactory. An assessment of each of the development objectives follows. (i) Improve the efficiency of road transportation in Nicaragua through the rehabilitation of transportation infrastructure along the key international trunk road corridors. This objective has been achieved highly satisfactorily. The major civil works contracts for the rehabilitation of the Managua-Izapa and the Muhan-El Rama road sections were fully completed and put into operation within the project implementation period, with no significant cost overruns. Both sections form part of the highest ranking corridors (in terms of IERR and NPV) for road improvement, since they served as important links in the strategic network of Nicaragua and the other Central American countries. The rehabilitation of these sections of the corridors has eliminated the transport bottlenecks in the north-south corridor to Honduras and also in the corridor to the Atlantic coast. The Managua-Guasale corridor was seriously damaged (actually, completely severed at various locations) by Hurricane Mitch in 1998, thereby making transport movements even more difficult. Rehabilitation and widening of the Managua-Izapa section (62.5 km) was essential to Nicaragua and to regional trade because this is the most trafficked section of the north-south trunk road between the Honduran and Costa Rican borders. Other sections near the Honduran border are being financed by BCIE, and the completion of the restoration of the entire corridor is expected by December 2007. This will help facilitate interregional transport and trade, in compliance with the Secretaría de Integración Económica Centroamericana (SIECA) plans, the Plan Puebla-Panama, and the Dominican Republic–Central American Free Trade Agreement (DR-CAFTA). Likewise, the Muhan-El Rama roadway (90.3 km) has resulted in the completion of the east-west corridor, linking Managua to the Atlantic at the port of El Rama. The corridor improvement was also financed with IDB and DANIDA funds for its two intermediate links. Its completion has produced major economic and social impacts for the departments of Boaco, Chontales, and RAAS.

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The completed civil works has also extended the life of the pavement, widened it, and reduced its roughness (from International Road Roughness Index [IRI] 7 in the Managua-Izapa section and IRI 10 in the Muhan-El Rama, to IRI 2 in both sections), with major improvements in terms of reduction in vehicle operating costs, time savings, and maintenance costs. These trunk roads are now in a condition to better support the growing range of exports and imports between Nicaragua and its major commercial partners. (ii) Improve access to productive agricultural areas and to rural communities, especially those located in Hurricane Mitch-damaged regions. The project successfully achieved the implementation of the Rural Roads Stabilization Program (PEA). This rating is justified since the program aimed at: (a) restoring transport infrastructure damaged by Hurricane Mitch in Region I—Esteli, Madriz, Nueva Segovia, among other zones; (b) supporting Nicaragua’s poverty reduction strategy by generating job opportunities for skilled and unskilled people; and (c) strengthening national private contractors and the local consulting industry. The Rural Roads Stabilization Program by adoquine was administered and managed by MTI, which successfully restored 203.5 km, of which 27.82 km were implemented by community groups through 32 special- purpose community modules (Módulos Comunitarios de Adoquinado).. Other donors such as BCIE also supported this program and financed the stabilization of 19.3 km of roads in Region I. In addition, another 83 km of gravel road were resurfaced, hence the MTI achieved a total of 305.8 km of improved rural and secondary roads.

The PEA represented the Government’s adoption and expansion of the rural roads program of the Third project. This was due in part to the technologies chosen (adoquine) and the continued evidence of its benefits and social impacts. These beneficial impacts arose from the fact that (a) both the production of adoquines and their placement in the roadbed are highly labor-intensive operations; (b) fewer petroleum-derived, imported inputs are consumed than for other stabilization techniques; (c) completion of the project cycle required less logistical and managerial support because of the simplicity of adoquines; (d) roads require dramatically reduced levels of maintenance afterward; and (e) less use is made of costly, heavy equipment during implementation or subsequent maintenance. As a result, the project has restored the secondary and rural roads in a cost-effective and sustainable manner given the prevailing levels of local know-how. This has had both direct benefits such as reducing transport costs and indirect and derived benefits such as having a clean environment without suspended dust clouds, improving rural accessibility and communication, supporting agricultural production and other economic activities, and facilitating access to health, educational, and social services. The PEA is now a national program of growing importance in the transport sector in Nicaragua due to excellent results on the ground and the proactive participation of the private sector throughout the project cycle. The GON considers it to be one of the key

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pillars for promoting economic development and poverty reduction across the country. Other benefits of PEA’s implementation include the generation of short-term employment for local firms and community groups. These outcomes were possible because the project proposed and designed a special mechanism that consisted of organizing rural groups into microenterprises called Módulos Comunitarios de Adoquinado (MCA), which allowed the communities to participate in the execution of works. By the end of the project, about 7,960 skilled and unskilled workers had been employed, and the MTI estimated over 200,000 community people from about 50 communities received direct and indirect benefits. In this manner, the adoquine strategy has proved to be a very effective instrument to mobilize local resources (materials, labor, and technology), improve community and local involvement in planning and decisionmaking, and organize communities to help address their own needs. (iii) Help ensure the sustainability of the road improvements. This objective has been achieved highly satisfactorily due to: (a) the legislative approval for funding of the FOMAV via a surcharge on fuels, (b) the priority given to continuing the periodic maintenance by private contractors and routine maintenance by microenterprises; and (c) the technical assistance and training activities for the staff responsible for road maintenance in MTI and FOMAV. One of the project’s most important contributions was the technical support provided for the preparation and submission to Congress of a bill to reform the FOMAV Law that called for the levying of a surcharge on fuels in order to provide the funds needed for financing FOMAV in a sustainable manner. The establishment of secure funding for FOMAV also became incorporated into the broader IDA-GON dialogue and was one of the triggers for the second tranche of the PRSC program for Nicaragua. Up to 2005, the FOMAV work-program was partially funded under project provisions for a Fondo Semilla, provided by IDA and IDB, which supported the maintenance of 348.1 km by contract and provided the opportunity for a successful start-up and demonstration of the role of FOMAV to the Nicaraguan public. Also, the project provided technical assistance for the staffing and organizational establishment of FOMAV, and for the development of its annual work programs through private contractors for periodic maintenance and through microenterprises for routine maintenance. Currently, the funds collected are being transferred to FOMAV on time, and FOMAV is now expanding its maintenance works to 2,120 km of the road network. Public opinion surveys show that FOMAV continues to strengthen its current positive public image due to its good track record and its promotion of increased private sector participation in the improvement and maintenance of roads. With regard to routine maintenance, five additional microenterprises have been

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created and are fully operational and providing maintenance services for the roads program. Until March 2007, MTI managed and supervised a total of 33 microenterprises that maintain 2,164 km of roads. The creation of five additional microenterprises has generated 411 job opportunities for skilled and unskilled workers. The microenterprises have all been transferred to FOMAV, in compliance with requirements for the Fourth Road Rehabilitation and Maintenance Project. The Third Road Rehabilitation and Maintenance Project also provided training activities for the microentrepreneurs, which increased their capacity in terms of organizational aspects such as teamwork, administration, programming, costs, accounting, report writing, legal and tax affairs, and administration of their contracts. Periodic maintenance works were implemented satisfactorily by private contractors. This program followed the initiative that began during the Second Road Rehabilitation and Maintenance Project for the introduction of periodic maintenance by contract. In the Third Road Rehabilitation and Maintenance Project, MTI continued promoting a policy for contracting out virtually all rehabilitation and maintenance works, through competitive selection processes. As a result, private sector participation has increased in terms of design, construction, and maintenance works, all supervised by MTI or a private consulting firm. On the other hand, state enterprise participation under the Regional Road Maintenance Agencies (Corporación de Empresas Regionales de Construcción, COERCO), was reduced to a more supplementary role and focused on areas with lower contractor presence. The highly satisfactory overall assessment of this objective was also achieved due to the training and institutional development component that strengthened the capabilities of MTI, FOMAV, and microentrepreneurs in various aspects of the project management cycle and managerial organization.

3.3 Efficiency The project’s economic rate of return is quite robust. At appraisal the Internal Economic Rate of Return (IERR) for the road rehabilitation component was estimated at 29 percent and the Net Present Value (NPV) was estimated at US$26.9 million. The ex post economic analysis for the road rehabilitation component resulted in an NPV of US$98 million and an IERR of 39.2 percent, which indicates a very robust economic justification. For the rural and secondary roads stabilization, the ex post analysis was carried out for 21 representative subprojects taken from the zones of intervention—Estelí (2), Nueva Segovia (13), Madriz (2), Rivas (2), Masaya (2)—and the ex post economic analysis resulted in an IERR of 21.3 percent and an NPV of approximately US$15.9 million. In general, the combined NPV of the representative sample of road subprojects remained positive at a 12 percent discount rate as envisioned at the appraisal.

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3.4 Justification of Overall Outcome Rating

Rating: Highly satisfactory

The overall outcome rating is highly satisfactory based on the assessment of the economic relevance of the project and the achievement of the appraisal objectives. As explained in the previous sections, the relevance of the project continues to be very high and its benefits are substantial. The achievement of the Project Development Objective is highly satisfactory given the (a) prompt restoration of key transport links that were damaged by Hurricane Mitch, (b) successful expansion of the adoquine program, (c) progress made in FOMAV for ensuring sustainability of the road improvement programs, (d) progress made in strengthening the environmental unit at MTI, (e) successful and expanded participation of the private sector in road construction, and (f) provision of maintenance mircroenterprises. The project represented the main IDA response in the transport sector for the restoration of key sections of the main and rural roads networks that had been destroyed or damaged by Hurricane Mitch. As such, it was a very timely and appropriate project. In addition, achievements such as the National Assembly approval of the fuel surcharge that is being used for funding FOMAV road maintenance is a truly landmark achievement. For the first time, it may be possible to guarantee road maintenance funding in Nicaragua and hence provide one of the key inputs needed to break out of the vicious cycle of improving roads and then leaving them to deteriorate. Other worthwhile achievements included the completion of key steps to introduce and mainstream social safeguards within the MTI project cycle due to the preparation of a manual for the mitigation of the social impacts of road projects. Hence the implementation of this project has not only left Nicaragua with better roads but has also laid the institutional framework and the groundwork for promoting long-term sustainability of the road network.

3.5 Overarching Themes, other Outcomes, and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development

Based on surveys carried out by the MTI, the rural roads stabilization component has improved the livelihood of rural residents in terms of improved mobility year-round and access to facilities for education, health, banking, and social services. In general, the rural communities in Region I, one of the poorest areas of Nicaragua, benefited directly in economic terms through the cash injected during construction and by the potential future impact of paved roads on living standards through increased market competition and better year-round access to economic centers, government and cultural resources, and so forth. These

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achievements have contributed to an economic stimulation of local communities, which can now trade more of their products, and which has in turn generated the creation of microenterprises for complementary and related local services and the establishment of new businesses (stores, restaurants, cooperatives, and so forth). Annex 8 has further details on the projects social development impacts.

(b) Institutional Change/Strengthening

The IDA through its Third Road project has continued to provide a significant contribution to the institutional development of the transport sector in Nicaragua. In particular, the project: (a) provided the institutional, technical, and legal support needed to establish a reliable funding mechanism for FOMAV; (b) improved the implementation capacity of FOMAV by expanding the use of private contractors that were selected via public building processes for periodic maintenance of the road network; (c) supported a pilot study for reforestation and implemented its first phase; (d) helped mainstream safeguard considerations into the project cycle by developing a social aspects manual; and (e) strengthened the technical capacity of the key staff of MTI, FOMAV, and microenterprises through the introduction and execution of annual training programs. Regarding the latter, the training program focused on the following areas: planning and programming, information technology, environmental and social aspects; accounting, financial, and procurement procedures; and road engineering, project management, and administration. Throughout project implementation, there have been more than 100 training events, 68 in Nicaragua and 32 abroad. In sum, 539 MTI and FOMAV personnel were trained. As a result, MTI has strengthened the Environmental Unit, the Directorate of Finance and Administration, and the Directorate of Transport and its Procurement Unit, among others. The project setup, whereby UCP relied on various MTI directorates to develop the capacities needed to carry out key tasks, was also conducive to the success of the institutional programs. Hence, the institutional development achievements can be rated as substantial.

(c) Other Unintended Outcomes and Impacts (positive or negative)

Rehabilitation of the main and rural roads, together with the creation of microenterprises dedicated to road maintenance, have provided unexpected project outcomes that have had significant positive impacts. For example there has been a significant increase in the use of bicycles in areas whose roads have been stabilized with adoquines. The MTI reports that residents of many communities have purchased bicycles and hence bike traffic has grown from near zero before the project to over 300 bike trips per day on adoquine roads. The use of bicycles was virtually impossible before the project due to the condition of the roads. Facilitating Non-motorized Transport (NMT) (in

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particular bicycle traffic) is a particular advantage of adoquines over gravel roads. Supporting and enabling such a cost-effective modality for improving the mobility of rural peoples could turn out to be one of the major unintended benefits of the rural roads adoquine stabilization program. The participation of the private sector has been another indirect result of the project. This participation was due partly to the use of adoquines. Production of adoquines is 100 percent Nicaraguan, not only with respect to the materials but also to the labor force for its production and handling. By 2004, adoquine production capacity was increased from 2.8 million per month to 5.5 million per month, according to estimates of the Nicaraguan Chamber of Construction. Another outcome was the development of the private sector as the primary supplier of personnel and facilities for the design, supervision, construction, and maintenance of road projects. The strategy, delineated carefully by IDA within the execution of several projects in the sector, has been achieved successfully. Periodic and routine maintenance are undertaken by private contractors for the most part. FOMAV uses private firms for the maintenance of the paved main road network, with plans to use this modality as it expands support to the municipal network. Private companies also carry out and supervise road rehabilitation projects. Small private contractors manage the rehabilitation of secondary and tertiary roads. Finally, routine maintenance is undertaken by small community microenterprises. In general terms, these suppliers are now the entities responsible for service delivery such as design, construction or rehabilitation, and periodic and routine maintenance of roads. Furthermore, these entities are selected competitively. Thus, currently the preferred supplier in Nicaragua is the private sector. This is a significant achievement after 10 years of IDA’s involvement, given the previous period of operations was dominated by the public companies such as COERCO which carried out road improvement works by force account and did not perform very well.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops

The beneficiaries interviewed by the MTI were overall very positive about the project’s achievements, and the improvements it bestowed on their daily activities. Annex 8 presents selected comments of beneficiary stakeholders about the poverty and social impacts of the rural roads stabilization component. In sum these include statements to the effect that (i) standards of living in terms of health and working conditions for local residents who use the adoquine rural roads on a daily basis have improved. This is because dust clouds/muddy nuisances have been removed and transiting the road now requires less time and effort; (ii) more transport services are being offered to residents now, because in the past operators were reluctant to enter areas with poor roads; (iii) there has been an increase in the commercialization of agriculture since they can more easily bring produce to market; and (iv) rural residents are more inclined to

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borrow money and invest in their farms.

4. Assessment of Risk to Development Outcome

Rating: Moderate

The level of risk to development outcomes is rated as modest on the basis of the existence of factors that would enhance the sustainability of the road investments financed under the project. Technical sustainability of physical investments in the transport sector made under the project is likely, given, on one hand, MTI’s improved capacity to plan, program, and maintain the rehabilitated roads in a sustainable manner through the microenterprises program, and, on the other hand, by FOMAV’s enhanced institutional and financial capacity to sustain the road improvements through the provision of maintenance. It has been estimated that FOMAV will receive sufficient revenues from user fees and government transfers to cover the costs of the entire maintainable network (all roads in good and fair condition). Some budgetary allocations will still be needed for the remainder of the unimproved network that remains the responsibility of MTI. Mitigation of risks to this development outcome has been provided particularly through the approval of the Fourth Road Rehabilitation and Maintenance Project and the similar projects from IDB, the MCC, BCIE, and DANIDA. In addition, FOMAV will contribute to the financing of road maintenance contracts to be awarded by various rural municipalities, thereby further solidifying its mandate and expanding private sector participation.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry

Rating: Satisfactory Overall, the Bank’s performance during preparation and appraisal was satisfactory. The project was prepared by a multidisciplinary team with additional inputs from the environmental and social sector experts. The project team that prepared the Third Bank-financed operation drew on the lessons learned from the First and Second Road Rehabilitation and Maintenance Projects, which were very successful in their implementation and their contributions to improving the transport sector in Nicaragua. The project was also designed based on the Government’s development strategy and in the context of the CAS and Donors transport strategies. There were also

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complementary conditionality requirements, especially for road maintenance, under the IDA’s Poverty Reduction Support Credit (PRSC I & II), which proved to be helpful. In addition, there was a strong Bank effort to coordinate its interventions in the transport sector with ongoing efforts from other international financial organizations, particularly DANIDA and IDB for improving the key trunk corridors and to support the FOMAV road maintenance program. Quality at Entry is therefore rated as satisfactory.

(b) Quality of Supervision

Rating: Highly Satisfactory The Bank team has carried out 23 missions, supervising project implementation while providing technical assistance and advice to MTI, since May 2000. The Bank provided training for the procurement and financial management team of the UCP, thus promoting fiduciary compliance during project implementation. Also, the Bank provided training in the use of the Highway Design and Maintenance Model 4 (HDM4) and Road Economic Decision Model (RED) so as to install and develop the Pavement Management System (PMS) and to develop the capacity of the staff of the Transport Directorate of MTI to carry out economic analyses. Project Supervision reports were generally well written and highlighted the key issues. Over the course of implementation, the project had the same Task Team Leader, and as a result of this continuity, adequate project supervision was fully ensured, as shown by the results on the ground. The Bank team pursued the improvement of FOMAV that was established under the First Road Project. FOMAV has grown considerably from its US$2.4 million program in the initial year; in 2006 the funded program was over US$18 million. These actions underscore positive steps toward sustainability of the roads improved by the IDA and under all other Donor-funded projects.

(c) Justification of Rating for Overall Bank Performance

Rating: Highly Satisfactory

Bank performance was rated highly satisfactory. This rating is supported by the project results and the achievement of objectives and physical outputs plus the coordination of plans and objectives with the broader IDA Poverty Reduction Program (PRSC I & II). Moreover, it is based on the appropriateness of the project design which focused on improving sector planning, attaining financial sustainability for road maintenance, and the promotion and development of the local construction industry through adoquine stabilization, which in turn simplified future maintenance roads needs.

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5.2 Borrower Performance NOTE: When the Government and implementing agency are indistinguishable, provide rating and justification only for Overall Borrower Performance.

(a) Government Performance

Rating: Satisfactory

Government performance is rated as satisfactory on the basis of its role during project preparation and implementation. Its performance during project preparation was satisfactory due to the setting of appropriate priorities for both rehabilitation and maintenance of the network following the damage caused by Hurricane Mitch. It had also organized a very good Donor conference at which the programs and priorities were explained, and this led to the success in obtaining financing. The subsequent development of the NDP during project implementation further focused its priorities and enhanced coordination of donor strategies. There was also adequate coordination and consistent dialogue between government officials and IDA and other Donors involved. The GON demonstrated its commitment to achieving the development objectives by providing support for the institutional reforms made under the project, for example, approving the FOMAV Law. Allocation of counterpart funding fluctuated during the period because the Nicaraguan economy was affected by several political and fiscal crises. This was a very difficult and polarizing political period. Despite the overarching problems, the Government was able to respond to implementation issues that required its attention. On balance, the satisfactory rating is justified due to the fact that most of the outcomes and outputs of the project were achieved satisfactorily.

(b) Implementing Agency or Agencies Performance


Implementing Agency: Implementing Agency (MTI and its UCP) Performance of the MTI and its UCP is rated highly satisfactory because most aspects of project management and administration were completed fully satisfactorily. It was especially so in terms of MTI/UCP management of the technical, economic, safeguards, and fiduciary requirements throughout the project cycle. The UCP was committed to achieving the Project Development Objectives. The staff of the UCP showed consistent capacity to handle project implementation and provide good coordination with the Dirección General de Vialidad and the Dirección General de Administración y Finanzas of MTI on the technical and financial aspects of the project. As a result, the project was well

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managed, and implementation issues were solved promptly and adequately, including procurement and fiduciary tasks. Relationships between the different stakeholders were managed appropriately and the UCP was able to play its coordinating role between the different stakeholders such as Directorates within MTI, FOMAV, and among the microentrepreneurs and private contractors, in a highly satisfactory manner. Transition arrangements for activities supported by the project into regular operations were also carried out well. The studies for preparation of the Fourth transport project were completed on time, thereby allowing IDA to already approve and start up the Fourth Project (CR-4185 NI). The overall project management effort of the implementing agency has thus been very good and has been rated highly satisfactory.

(c) Justification of Rating for Overall Borrower Performance


The rating for overall borrower performance is based on the satisfactory performance at preparation and appraisal and highly satisfactory management of project funds, good coordination, achievement of financial sustainability for FOMAV, and achievement of other project outputs as planned. These together contributed to a highly satisfactory overall outcome for the project.

6. Lessons Learned Importance of experience and lessons learned under previous projects. IDA and government experience from previous operations in the sector helped to enhance supervision effectiveness and ensured leadership and involvement during project implementation. Transport sector operations initiated by IDA had continuously pursued the objectives of improving managerial efficiency and reducing infrastructure bottlenecks in Nicaragua. In this context, each project was supportive in the introduction of innovative strategies such as road stabilization programs, sustainable mechanisms for periodic and routine maintenance, and expanding private sector participation in the sector. Bank and Government’s proactive participation to manage change. During 2002–05, Nicaragua was affected by a difficult political and economic climate which resulted in, among other things, a shortage of counterpart funds. Within this context, proactive actions from the Government and IDA were essential to ensure project financing and the achievement of the development objectives. Near the end of the project, there were repeated setbacks generated due to the unusual duration and intensity of the rainy seasons in Nicaragua. In this case, IDA supported three extensions of the closing date of the project, but for a total of only 18 months. Strong leadership, open communication between UCP staff

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and the task team leader, steady commitment, and attention to emergency issues were essential to achieving results on the ground. Establishing a Road Maintenance Fund is a difficult but worthwhile goal. The implementation of a mechanism to finance periodic and routine maintenance works has had a strong impact in promoting the sustainability of project outcomes. It was accomplished in two steps. Initially, the FOMAV law was developed under CR 2871-NI and it was established in 1998 as a legal entity, but without a dedicated source of funding. This enabled the commencement of maintenance by contract operations and the building of public support for FOMAV. The next stage involved amending its law to incorporate a reliable funding mechanism. After 2002 obtaining the approval of the fuel surcharge became an increasingly difficult task as international oil prices rose and the Administration’s support in the Congress waned. In response, MTI developed a program to build support for FOMAV with the public, construction industry, municipal governments, and members of the Congress. The MTI thereby initiated a series of dialogues with the public and the National Congress, and with local and other levels of government, and completed the legal drafting of the bill in 2004 for the mechanism needed to fully establish FOMAV. The subsequent approval of the law and the establishment of reliable funding for FOMAV since December 2005 is proving to be an important factor to ensuring the maintenance of the road network. Continual training of project staff unit can help compensate for frequent turnover. Project staff turnover was beyond the control of the UCP and was mainly due to political changes at higher levels of the MTI. However, this did not prevent the UCP from performing satisfactorily, partly because continual training events were implemented under the project for new staff. To a large extent the Third project also benefited from the presence in various MTI directorates and FOMAV of the cohort of staff that had received Master’s Degrees under the institutional program of the Second IDA Roads project (CR 3085-NI). Technical assistance, training, and equipment to improve the project’s management unit were key factors to ensuring the project’s implementation success. Road Stabilization (Adoquine) Program is highly appropriate for the rural poor. The PEA yielded several important advantages in terms of social and economic outcomes. As a cost-effective rehabilitation method, the use of adoquines reduced maintenance costs and facilitated the participation of small local businesses. It also uses local technology and materials, supports bicycle traffic, and has a very low environmental impact. The PEA has proved to be a very effective instrument to generate productive short-term employment for skilled and unskilled workers from the communities, through the mobilization of local resources (material, labor, and technology), expansion of community and local involvement in planning and decisionmaking, and the organization of

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communities in addressing local needs. This type of program is very cost-effective and can produce positive social and economic impacts in the beneficiary zones.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies

The Borrower’s comments were consistent with the ICR’s assessment of the project. There were no major issues between the IDA and the MTI during project implementation. See Annex 7 for detailed MTI comments on project implementation.

(b) Cofinanciers

Not applicable.

(c) Other partners and stakeholders

Stakeholders have been pleased with the project and did not raise any issues. See Annex 8 for detailed comments on the rural roads stabilization component.

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Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent)

Components Appraisal Estimate(US$ million)

Actual/Latest Estimate (US$ million)

Percentage of Appraisal

1. Road Rehabilitation and Improvement Program 36.4 39.7 109.0%

2. Rural Transport Improvement Program 24.9 28.3 113.6%

3. Road Network Maintenance Program 12.6 10.0 79.4%

4. Capacity-building Program 8.1 10.7 132.0%

Total Baseline Cost 82.0 88.7 108.2% Physical Contingencies Price Contingencies

5.4 0.0 0.0%

Total Project Costs 87.4 88.7 101.5% Project Preparation Facility (PPF) 0.0 0.0 —

Front-end fee (IBRD only) 0.0 0.0 —

Total Financing Required 87.4 88.7 101.5% (b) Co-financing

Source of Funds Type of Financing

Appraisal Estimate

(US$ million)

Actual/Latest Estimate

(US$ million)

Percentage of Appraisal

[Government] 12.4 5.6 45.2% [IBRD/IDA] 75.0 8.1 110.8% [Donor A] [WB-administered

TF] — — —

[Donor B] [Parallel financing] — — —

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Annex 2. Outputs by Component The project achieved most of its outputs and the overall assessment of the project output is rated satisfactory. The Bank’s supportive attitude together with the GON and UCP commitment toward the project were key elements for the accomplishment of the targets set under each component. Component 1: Road Rehabilitation Program (US$36.45 million estimated/ US$39.72 million actual cost). This component was intended to finance the rehabilitation of the Managua-Izapa and the Muhan-El Rama sections, as part of the rehabilitation of the Managua – Airport – San Benito – San Lorenzo – Muhan – El Rama road (290 km) initiated under CR-3085-NI (1998-2005). Approximately US$36 million was assigned for this component, whose physical targets were fully achieved as follows: (a) the Managua-Izapa section works were divided in two contracts, executed between April 2002 and November 2003, at a cost of US$20.9 million; and (b) the Muhan-El Rama section works were divided into three contracts, which began in May 2002 and finished in September 2003, at a cost of US$18.8 million. At project completion, 152.9 km of primary trunk roads were rehabilitated, at a total cost of US$39.7 million. The total cost exceeded the estimated amount by US$3.3 million; the incremental cost was due to improvements of the road pavement, and hydraulic and drainage works. Both sections were opened to traffic by the end of 2004. Component 2: Rural Transport Improvement Program (US$24.93 million estimated/ US$28.30 million actual cost). This component primarily sought to provide for the stabilization of about 300 km of rural secondary and tertiary roads, through a restoration program based on adoquines and gravel standards. All of the activities were completed and the component is rated satisfactory due to the achievement of its desired outputs. The Rural Roads Stabilization Program (PEA) has proved to offer several important advantages: it reduces maintenance costs, increases the participation of small local businesses, uses local technology and material, and has a very low environmental impact. Under the PEA, a total of 203.5 km were restored with adoquines. For the execution of the PEA, local private contractors selected through competitive bid processes were used predominantly. For a few very short sections of roads, 32 community groups were organized as Módulos Comunitarios de Adoquinado (MCAs) and they rehabilitated about 28 km of the PEA total. In terms of the supply of adoquines, private companies increased their production capacity from 2.8 million per month to 6.0 million per month. For some firms, this was sufficient to justify the modernization of their factories, thus leaving the country with a more efficient and greater installed production capacity than that existing before the project. Also as a result of the PEA, it was estimated by MTI that about 7,960 skilled and unskilled workers were employed, and over 200,000 rural community residents benefited. Component 3: Road Maintenance Program (US$12.65 million estimated/ US$10.04

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million actual cost). The component was divided into three subcomponents that included the implementation of: (a) periodic maintenance by private contractors, (b) routine maintenance by microenterprises, and (c) the Road Maintenance Fund (FOMAV). This component is rated highly satisfactory. In relation to the first subcomponent, the goal was to continue with the periodic maintenance program initiated under the previous project and managed by MTI. This program was a demonstration program intended to foster the use of private contractors, and in addition it was to be used to introduce new technologies for asphalt pavements. Hence, the periodic maintenance activities were implemented by private contractors and included the application of new construction procedures and materials to achieve longer-lasting performance for crack-filling, patching, road signaling, road widening, and asphalt-covering works. In sum, about 82.8 km of periodic road maintenance was carried out. Implementation of periodic maintenance works was also ensured with technical assistance and capacity-building activities (which included the application of the HDM-4 model) provided by MTI. With regard to the second subcomponent, this was an extension of the routine maintenance program by microenterprises that originally started under CR-2871NI. During project implementation, five additional microenterprises were formed in order to serve over 600 km per year. At the end of the project, there were 33 microenterprises, which maintain a total of approximately 2,164 km. The creation of these new enterprises has generated an estimated 411 new job opportunities for skilled and unskilled workers, and benefited rural and semi-rural areas with a combined population of over 1,887,000. Activities carried out by the microenterprises comprised: clearing the roadway, clearing and building road drains, channeling waters, cleaning bridges, controlling vegetation, and clearing gutters and landslides. The total cost of the overall maintenance program was US$7.7 million, which is close to the US$8.0 million originally budgeted. In terms of the third subcomponent, the most important achievement was the approval of the reform to the FOMAV Law, which established the levying of a surcharge on fuels. During the project implementation period, FOMAV maintained 348.12 km very successfully and attained a positive public image. The spot improvement/periodic maintenance program under FOMAV administration had a total cost of US$2.3 million at the end of the project, slightly under the US$2.5 million initially expected. Once the bill to reform the FOMAV Law was approved and the implementation capacity-building program know as the Fondo Semilla took place, the periodic maintenance and routine maintenance by microenterprises were transferred from MTI to FOMAV administration as required under the Fourth IDA project. Other successful results achieved through this component’s implementation included the reduction of COERCO (Force Account Units) participation and the institutional strengthening of microenterprises associates and FOMAV staff. Component 4: Institutional and Technical Development Program (US$8.1 million estimated/ US$11.04 million actual cost). This component is rated satisfactory since

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estimated outputs were satisfactorily attained. Subcomponents included in this program mainly focused on the provision of technical assistance and capacity-building activities. In terms of technical assistance and support provided, the activities financed by this component included: (a) consultancy services for design and supervision studies of rehabilitation and maintenance works (Components 1 and 2); (b) the design and supervision of the overall contract maintenance program, and especially for the establishment of FOMAV; and (c) technical assistance, training, and equipment for updating road condition inventories and prioritizing investments and maintenance programs using the Bank’s HDM and RED models. The safeguards program also included implementation of a reforestation program near the Bluefields Town, in a nearby corridor connecting the Cerro Wawasan and Cerro Silva protected areas. This was intended to compensate partially for the indirect effects of road projects. Training and capacity-building activities were organized according to a plan agreed between IDA and MTI, which had successful results. As part of this plan, a total of 100 events were conducted for MTI and FOMAV staff: 68 local events with an attendance of 475 MTI staff, and 32 international training events with the participation of 64 staff. Training events for MTI and FOMAV staff focused mainly on contract management, project design and implementation, design and implementation of training programs, traffic origin-destination surveys, and development of transport sector planning, among others. With regard to microenterprises, capacity-building events aimed to strengthen organizational aspects such as teamwork, administration, task programming, cost control, accounting, report writing, legal and tax affairs, and administration of their contracts. A total of 396 microentrepreneurs attended training events.

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Annex 3. Economic and Financial Analysis Road Rehabilitation Component

Table 1

Economic Costs and Benefits Road Rehabilitation Program

Length (km)

Costs (US$/km 000)

NPV1 (US$000)

IERR2 (%) Section SAR

Estimate Actual SAR Estimate Actual SAR

Estimate Actual SAR Estimate Actual

Managua – Izapa 62.4 61.5 1,130 1,816.09 17,500 84,717 34.6 50.2

Las Piedrecitas – Km11

4.2 4.2 400 616.14 900 10,164 20 50.9

La Refineria – Km 13.4 4.8 4.8 400 616.14 2,400 8,344 27 41.6

Km 13.4 – Nagarote 27.6 28.3 165 308.07 7,500 27,423 36 44.4

Nagarote – Emp. Izapa 25.8 24.2 165 275.74 6,700 38,786 37 58.8

Muhan – El Rama 90.2 90.3 337 638.79 9,400 13,617 23.8 22.2

Muhan – La Gateada 20.0 21.0 150 254.69 2,000 4,886 20 24.2

La Gateada – Esperanza 61.3 60.3 95 190.40 6,600 7,596 25 21.4

Esperanza – El Rama 8.9 9.0 92 193.70 800 1,135 25 21.3

Total 152.6 151.8 1,467 2,454.88 26,900 98,334 28 39.2 1. Net Present Value. 2. Internal Economic Rate of Return. The ex ante cost-benefit analysis included the two main components of the project: (a) road rehabilitation, and (b) the rural road program. Under the road rehabilitation component, an economic ex post assessment of the roads was carried out. The data were obtained from MTI (2005 and 2006 traffic levels, actual construction costs, and maintenance cost estimates) for each of the road sections. The results for the project were an NPV of US$98.334 million and an IERR of 39.2 percent, which is higher than originally expected. This is also shown in the analysis of each section, as shown in Table 1. Only in the cases of the road sections La Gateada-La Esperanza and La Esperanza-El Rama, are the IERR slightly lower than those originally projected, 21.4 percent and 21.3 percent, respectively, due to the increase in construction costs. However, the rates of returns are still robust. A sensitivity analysis was also performed on the basis of an increase of 20 percent in costs and a similar reduction of benefits. The results obtained show that the economic

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indicators remain positive. As part of this road component, a considerable reduction in the cost of vehicle operation was achieved. This is due to the improvement in the level of road roughness (according to the International Road Roughness Index, IRI), which was reduced to 2 m/km for both sections, compared to what it was before, that is, 6 m/km (Managua-Izapa), and 9 and 10 m/km (Muhan-El Rama). Other benefits obtained through the rehabilitation of the aforementioned road sections are the reduction in travel time of passengers and of maintenance costs. Rural Road Improvement Program

Table 2

Economic Costs and Benefits Rural Transport Improvement Program

Economic Indicators

Section Department Length (km) Costs

(000 US$/km)

NPV1 (000 US$)

IERR2 (%)

AADT3

North (of Managua) 86.89 1, 668.73 11, 901 25.2 457 Santa Cruz/Lím Mcpal Estelí-San Nicolás 5.40 110.76 16 12.4 230

Lím Mcpal Estelí-San Nicolás-San Nicolás

Estelí 7.62 111.71 29 12.5 230

Lím Mcpal San Fernando-Japala/Emp. El Jícaro 9.20 136.63 409 16.6 291

Emplame El Jícaro/Inicio Zona Urbana-Japala 6.10 132.69 866 25.2 408

Japala-Teotecacinte I 7.68 122.36 1,836 42.0 634 Japala-Teotecacinte II 6.00 123.97 1,414 40.5 634 Japala-Teotecacinte III 6.00 115.30 1,452 42.9 634 Emp. Susucayan Santa Clara – FZU San Fernando 10.20 202.12 109 12.8 291

Inicio ZU San Fernando-Mozote 8.76 158.28 3,919 42.2 892 LM San Fernando/Japala-Emp. Susucayan Tramo I 5.48 158.71 652 21.7 408

LM San Fernando/Japala-Emp. Susucayan Tramo II

Nueva Segovia

5.58 167.88 616 20.6 408

Sotomo-San Lucas Madriz 8.87 128.32 583 18.5 427 South 50.13 784.17 2,163 15.8 397 Sapoá-Cárdenas (Tramo I y II) 15.18 256.98 1,898 1.5 168 Isla de Ometepe (Moyogalpa-Altagracia) Tramo I y II

Rivas 20.83 243.26 172 12.5 294

Masaya-Las Flores 6.20 148.23 1,923 35.0 989 Masaya-Tisma (Tramo I) Masaya 7.92 135.70 1,966 37.0 642 Roads with National Funds 24.19 591.46 1,826 18.8 343 Santa Rosa-Palacaguina Madriz 4.15 141.16 1,609 44.9 989 Emp. El Jícaro-FZU Jalapa 2.00 120.46 325 33.0 408 Ocotal-Macuelizo Tramo I 6.00 93.58 52 13.5 187 Ocotal-Macuelizo Tramo II 6.00 118.81 83 10.0 187 Ocotal-Macualizo Tramo III

Nueva Segovia

6.04 117.45 77 10.2 187 Total 161.21 3,044.36 15,890 21.3 421

1. Net Present Value (NPV). 2. Internal Economic Rate of Return (IERR). 3. Annual Average Daily Traffic (AADT). For the ex post economic analysis, a sample of 16 road sections was selected, equivalent to US$3 million in investment costs, as shown in Table 2.

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The economic assessment was performed applying the simplified model for road investment, known as the Road Economic Decision Model (RED).1 The data used are derived from the completed projects and are also obtained from the MTI statistical database. The results of the evaluation showed an IERR of 21.3 percent and an NPV of US$15.890 million at a 12 percent discount rate, over a 20-year evaluation period. The program also generated positive results in terms of: performance, reduction of future maintenance costs, stabilization of roads, and use of local resources (labor force and material), and the promotion of bicycle use. The RED model does not allow capturing the economic benefits of the increase in Non-motorized Transport (NMT) such as by bicycle users, due to the adoquine road stabilization.

1 The RED model evaluates net benefits of project alternatives characterized by the average level of service provided during the evaluation period; it also estimates the costs of vehicle operation and the cost of travel time using the HDM3 relations.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team Members

Names Title Unit Responsibility/ Specialty

Lending Emmanuel James Transport Specialist LCSFT Team Leader Adán Cajina Consultant LCSFT Technical Aspects Juan Quintero Environmentalist LCSEN Environmental Analysis Elena Correa Sociologist LCSES Social Assessment Roque Ardon Financial Specialist LOAAS Financial Mgt Livio Pino Accountant LOAAS Financial Mgt Rodrigo Archondo Callao Transport Specialist TUDTR Economic Evaluation Supervision/ICR Emmanuel James Transport Specialist LCSTR Team Leader Irani G. Escolano Procurement Specialist LCSPT Procurement Mary Lisbeth Gonzalez Consultant LCSEN Sociologist George Campos Ledec Ecologist LCSEN Environmentalist Elena Correa Sociologist LCSES Social Aspects Enrique Roman Financial Specialist LCCNI Financial Mgt Adán Cajina Consultant LCSFT Technical Aspects Emma Cubillas Consultant LCSTR Procurement Juan de Vicentini Consultant LCSTR Technical Assistance German Escobar Consultant LCSTR Financial Mgt Oswaldo Patiño Consultant LCSTR Institutional Specialist

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(b) Staff Time

Annex 5. Beneficiary Survey Results N/A

Annex 6. Stakeholder Workshop Report and Results N/A

Staff Time No. of staff weeks

Fiscal Year Lending2000 LEN-BB -NI Road Rehab. and Maintenance 9.27 2001 LEN-BB -NI Road Rehab. and Maintenance 20.71

Total: 29.98 Fiscal Year Supervision/ICR

2002 SPN-BB -NI Road Rehab. and Maintenance 9.25 2003 SPN-BB -NI Road Rehab. and Maintenance 9.27 2004 SPN-BB -NI Road Rehab. and Maintenance 17.87 2005 SPN-BB -NI Road Rehab. and Maintenance 14.53 2006 SPN-BB -NI Road Rehab. and Maintenance 14.07 2007 SPN-BB -NI Road Rehab. and Maintenance 12.42 2008 SPN-BB -NI Road Rehab. and Maintenance 2.70

Total: 80.11 110.09

Stage of Project Cycle

Total:

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Annex 7. Summary of Borrower’s ICR and/or Comments on Draft ICR

INFORME FINAL POR EL PRESTATARIO

1. Evaluación de los Objetivos El Tercer Proyecto de Rehabilitación y Mantenimiento de Carreteras fue ejecutado de forma satisfactoria. Se logró la reducción de los costos de operación vehicular en los tramos Managua–Izapa (62.59 km) y Muhan–El Rama (90.30 km), al disminuir el IRI de 5 y 6 m/km en el primer tramo y de 9 y 10 m/km en el segundo hasta 1.5 y 2 m/km. En total, se benefició directamente a 3’140,374 personas que viven a lo largo de las vías. Se atendió aproximadamente 287 km de vías rurales, de los cuales, 204 corresponden a caminos rehabilitados por medio de adoquines y 83 km fueron mejorados con actividades de nivelación y conformación en las zonas rurales seleccionadas. Como resultado, se logró la disminución de la tarifa del servicio rural de transporte, el incremento del número de unidades de transporte público, la reducción del costo de operación vehicular al disminuir el IRI de 15 y 18 m/km a 4,5 y 5 m/km, la generación de 23,205 empleos directos y 8 126 indirectos, y el beneficio directo de 298,739 pobladores. En cuanto a mantenimiento vial por contrato, se dio mantenimiento periódico a 44.02 km y, mantenimiento rutinario a 386.95 km. En este componente se encuentra incluido el Mantenimiento Periódico, bajo la administración del MTI, con una ejecución acumulada de 82.8 Km. Adicionalmente tenemos el mantenimiento ejecutado por el FOMAV con una meta alcanzada de 348.12 Km, para un total de 430.97 Km. El mantenimiento rutinario de 2 164 km fue realizado por 33 microempresas. Esto generó empleo directo a más de 411 personas e indirectos a cerca de 2,466 personas; en total, se benefició a una población directa de 1’887,303 habitantes. Asimismo, se incrementó la participación del sector privado en las actividades de mantenimiento periódico, implementando por primera vez nuevas técnicas y materiales (adoquín), en los contratos administrados en el MTI y el FOMAV. 2. Componentes Original y Revisado Componentes originales: El costo total del proyecto es de US$75.00 millones provenientes del crédito y US$12.44 millones del aporte local. Estos montos no incluyen impuestos ni gastos operativos. El crédito se distribuyó en las cinco categorías siguientes: (1) Obras Civiles: (a) rehabilitación de la carretera Managua–Mateare–Izapa (62.65 km) y Muhan–El Rama (90.30 km), para un total de 152.95 km, (b) mejoras en el transporte rural (300 km), (c) mantenimiento periódico bajo la administración del MTI y el FOMAV (600 km), y (d) mantenimiento rutinario (1,800

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km); (2) Bienes; (3) Servicios de Consultorías; (4) Capacitación Institucional a las Microempresas y al FOMAV; y (5) No Asignados. El proyecto se trabajó con una tasa de retorno planeada de 28.70%, un valor presente neto de US$95.00 millones; para las carreteras principales, una TIR del 29%; y para el programa de caminos rurales, una TIR variable. Componentes revisados: El proyecto fue implementado satisfactoriamente. El monto ejecutado con recursos del crédito de la AIF fue de US$83.3 millones y el de aporte local, de US$5.7 millones. Se ha atendido de forma integral los corredores principales con la cooperación de otros donantes, con el fin de mejorar el nivel de servicio del transporte nacional e internacional; se redujo los costos de operación vehicular en más de un 20%; los tiempos de viajes se redujeron de doce a cinco horas para el caso de Muhan – El Rama, y de diez a cinco horas para el corredor de Managua – El Guasaule; se ha mejorado la seguridad vial y se ha implementado las normas sociales de la AIF para el proyecto de Managua (Las Piedrecitas)-Nagarote-Izapa, en el que se construyó doce viviendas para reubicar a las familias cuyas moradas estaban dentro del derecho de vía. Además, se ha fortalecido las capacidades institucionales en el manejo de contratos para el mantenimiento vial a nivel del MTI y el FOMAV. Se ha atendido más de 2,100 km con mantenimiento rutinario realizado por las microempresas, y más de 348 km, con el mantenimiento periódico de red vial pavimentada. En adición, se estableció el Programa de Mejoras del Transporte Rural en los departamentos de Nueva Segovia, Madriz, Estelí, Masaya y Rivas con una meta de 286.53 km con adoquinado y nivelación de la superficie existente, contratando empresas establecidas y módulos comunitarios de adoquinado (MCA). Los resultados son altamente satisfactorios, pues se redujo el IRI de 18 a 5 m/km, se ahorró más del 30% en los costos de operación vehicular y se la generó empleo local en más del 70%, con un promedio de 150 personas km/mes. El citado programa ha mejorado sustancialmente el espectro socioeconómico de la población beneficiaria en términos de salud, educación, movilidad, transitabilidad, ingresos anuales por áreas de siembra, accesos a créditos, mejores y más rutas de transporte colectivo, fortalecimiento de las capacidades municipales, capacitación y adiestramiento de la mano de obra local, fortalecimiento de las empresas privadas que fabrican adoquinados y de las empresas de supervisión ligada a la calidad de los materiales y de las obras. También se llevó a cabo los servicios de consultoría para el diseño y supervisión de obras, para la rehabilitación y los proyectos de adoquinado, auditorías externas, estudios ambientales en zonas de reservas nacional e internacional (RESA); la realización de la reforestación en la reserva de Mohagany con la participación los propietarios de fincas y con una ONG; los diseños de nuevos proyectos para el cuarto convenio de crédito CR-4185-NI; la continuidad de la evaluación de la línea de base del adoquinado en conexión con las mejoras del transporte rural, y la capacitación en

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cursos nacionales e internacionales de 539 participantes y de aproximadamente 396 socios de microempresas. 2.1. Componente de Rehabilitación La rehabilitación del corredor Managua–El Rama (290 km) estratégicamente fue programada para que se ejecutara con la participación del Banco Mundial (BM), BID y DANIDA, para cumplir con los objetivos de garantizar una vía de comunicación con la zona del Atlántico, en conexión con el puerto El Rama y Bluefields; pues, por ser una vía colectora principal, se beneficia todo el cluster ganadero y lechero de los departamentos de Boaco, Chontales y la RAAS. El costo total del corredor fue US$113.46 millones, de los cuales US$38.05, correspondiente al 34% de la inversión total en una longitud total de 120 km, fueron financiados por el BM. En términos reales, se ha finalizado las obras en todo el corredor y se ha logrado las metas físicas y de impacto económico y social. Igualmente, el corredor natural centroamericano, de una longitud de 222.29 km se desarrolla con un costo total de US$99.17 millones. La coordinación entre donantes tiene como objetivos mejorar el servicio de transporte nacional e internacional, garantizar el transporte regional hacia los puertos de Corinto y El Limón en Honduras, disminuir los costos de operación vehicular, vincular la demanda del transporte en conexión con los acuerdos regionales con el SIECA, el Plan Puebla – Panamá y la implementación del DR-CAFTA. De manera particular, con el convenio de crédito CR-3464-NI, se ejecutó dos tramos de carreteras, con una longitud total de 152.89 km y una inversión de US$46’146,850 miles. En cuanto a los aspectos ambientales y sociales, la Unidad Ambiental del MTI ha participado directamente, durante las etapas de diseño, ejecución y evaluación, y en la aplicación de las normativas nacionales e internacionales. Las tareas principales han sido: (a) protección de aguas y de suelos, manejo de bancos de materiales, protección a la fauna y flora, elaboración de proyectos forestales, planes de manejo y gestión ambiental; (b) supervisión de los aspectos ambientales durante la construcción, seguimiento a las medidas de mitigación establecidas en los documentos de licitación consolidados en los estudios ambientales, coordinando su cumplimiento con las instancias involucradas; (c) cumplir con base legal ambiental. Otra experiencia positiva ha sido la implementación de las normas sociales relativas al reasentamiento voluntario de pobladores ubicados en el derecho de vía. Para el tramo de carretera Las Piedrecitas–Nagarote–Izapa, la División de Gestión Ambiental (DGA) asumió el reasentamiento de doce familias afectadas. Las principales acciones de intervención social fueron: (a) elaboración de un diagnostico socioeconómico de la población afectada; (b) coordinación a través de reuniones con la alcaldía municipal de Nagarote, para buscar una solución conjunta y el apoyo de la municipalidad al proyecto de reasentamiento; (c) donación de terreno por parte de la municipalidad y apoyo en materiales menores de construcción; (d) establecimientos de metodología de autoconstrucción de viviendas con un enfoque de género y preparación psicológica al grupo de trabajo de las familias afectadas y a las familias receptoras del grupo

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trasladado: se hizo las coordinaciones para realizar la inserción socioeconómica del grupo en la nueva comunidad; y (e) supervisión y monitoreo, técnica y conjuntamente el MTI y la alcaldía, del desarrollo de los trabajos de autoconstrucción. Con relación a la carretera Muhan–El Rama, se brindó seguimiento al plan establecido para la organización del proceso de reubicación de negocios y/o viviendas situadas en el derecho de vía en los tres tramos de carretera. La DGA brindó materiales y transportes necesarios. Los casos resueltos fueron 72. También se impartió talleres de educación vial-ambiental, de vigilancia epidemiológica y de capacitación sobre higiene y salud ocupacional. 2.2. Mejoras del Transporte Rural Se implementó el Plan Especial de Adoquinado en caminos rurales ubicados en las diferentes zonas productivas del país. Como resultado, se logró lo siguiente: (a) mejorar el nivel de servicio, reducir costos y contribuir con el desarrollo socioeconómico; (b) generar 7,960 empleos directos y, aproximadamente, 11,940 empleos indirectos; (c) contribuir al desarrollo de la industria del concreto; (d) desarrollar un programa de cobertura a nivel nacional; y (v) ejecutar la estabilización de 175.71 km con la empresa privada (contratistas) y 27.82 km con los Módulos Comunitarios de Adoquinado (MCA); además de 19.34 km con financiamiento del BCIE; para un total de 222.87 km y más de 83.00 km de nivelación de la superficie de caminos rurales. Se contrató 32 MCA que fueron contratados para ejecutar 27.82 km en total. Como resultado de la ejecución de este componente, se generó aproximadamente 23,205 empleos directos y se benefició directamente a pobladores que viven a lo largo de los caminos rurales beneficiados (298 739 personas). 2.3. Componente de Mantenimiento Vial Con la ejecución de este componente se obtuvo los siguientes resultados: (a) se creó un programa de mantenimiento de rutina con la participación de la comunidad, a través de la formación de microempresas de mantenimiento vial (la meta era formar cinco cooperativas adicionales a las existentes y atender 600 km adicionales de carreteras, para así contar en total con 33 microempresas y atender más de 1,800 km); (b) se creó un programa de mantenimiento periódico con soporte técnico-económico y utilizando el modelo HDM-3 y nuevos materiales y procedimientos constructivos; y (c) se creó y consolidó el FOMAV. En este componente, se encuentra incluido el mantenimiento periódico, bajo la administración del MTI, y el mantenimiento ejecutado por el FOMAV. Ambas instituciones tienen una ejecución acumulada de 430.97 km, de los cuales, en 44.02 km se utiliza técnicas para actividades periódicas y en 386.95 km, técnicas para actividades rutinarias con una inversión global aproximada de US$4 845 880. Los resultados de este componente fueron satisfactorios en términos de metas, el uso del HDM en su evaluación, las nuevas técnicas usadas y la participación del sector privado, bajo procedimientos competitivos públicos y nacionales.

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2.4. Fortalecimiento Institucional Como parte del fortalecimiento, se ha realizado las compras de bienes, como bienes de oficina, transporte y herramientas de trabajo para mejorar la gestión del personal del MTI. Este componente comprendió la asistencia técnica, capacitación y estudios necesarios para ayudar al MTI a ejecutar el proyecto y dirigir mejor el desarrollo del sector de carreteras o caminos. El apoyo de la AIF se empleó principalmente para el monitoreo del desempeño, la administración de los contratos, los estudios de origen y destino del tráfico, organización de la revisión anual del sector de transporte, formulación y supervisión del programa global de mantenimiento por contrato y el establecimiento del FOMAV. Además, incluyó lo siguiente: supervisión de las obras de rehabilitación, supervisión del mantenimiento periódico y del FOMAV, diseño de caminos rurales, supervisión de las obras de adoquinado, realización del estudio de la línea de base del adoquinado, estudio ambiental y socio-regional (RESA, por sus siglas en inglés), proyecto de reforestación, auditoría externa y los estudios y diseños de carreteras y caminos. La capacitación a nivel del MTI, FOMAV y microempresas fue un aspecto importante del fortalecimiento institucional. En cuanto al MTI, el plan de capacitación para el fortalecimiento institucional, nace de una encuesta para conocer las necesidades de cada una de sus direcciones generales. Come resultado, se priorizó las siguientes: planificación y programación de las inversiones y el mantenimiento vial, así como el fortalecimiento del PMS, la Unidad Ambiental, la Dirección de Adquisiciones, de las Unidades Coordinadoras de Proyectos (UCP) de la Dirección General de Vialidad (DGV), del personal de apoyo de los proyectos, y de las áreas de contabilidad, presupuestaria, financiera, legal, supervisión y auditorías. Todo esto se tradujo en un Plan de Capacitación Trianual acordado entre el MTI, la AIF y el FOMAV. El total de eventos realizados, entre cursos, seminarios y talleres, fue de cien para 539 participantes. En relación con la capacitación de las microempresas, se ha capacitado a más de 396 socios de microempresas de mantenimiento vial. Los temas trabajados estaban relacionados con los aspectos organizativos, trabajo en equipo, administración, aspectos legales de impuestos y administración de sus contratos. 3. Costos y Montos Totales del Proyecto El costo total del proyecto es de US$89,0 millones, de los cuales US$83,3 millones corresponden al aporte de la AIF del BM, y US$5,7 millones al aporte local. Este monto incluye impuestos y gastos operativos, y el aporte con recursos del crédito corresponde al 93.60%. El crédito está distribuido en cinco categorías: (1) Obras Civiles: (a) rehabilitación de la carretera Managua - Nagarote – Izapa y Muham – El Rama, (b) mejoras del trasporte rural (300 km), (c) mantenimiento periódico realizado por el MTI y el FOMAV (600 km), (d) mantenimiento rutinario (1 800 km); (2)

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Bienes; (3) Servicios de Consultorías; (4) Capacitación Institucional del MTI, Microempresas y FOMAV; y (5) No asignados . Las metas y objetivos fueron cumplidos a satisfacción como se indica en el PAD y el convenio de crédito CR-3464-NI. El monto total invertido es de US$83.3 millones con recursos del crédito, superior a los US$75.0 millones programados. El monto adicional representa la ganancia de los Derechos Especiales de Giros con relación al dólar estadounidense, la cual fue invertida para obtener más metas físicas que las programadas. 4. Evaluación sobre el Mantenimiento de Carreteras El Gobierno de Nicaragua en función de garantizar la sostenibilidad del mantenimiento vial de la red vial nacional y cumplir con los compromisos adquiridos con la AIF del Banco Mundial, promueve planes y programas que incluyen actividades de mantenimiento rutinario y periódico. De esta forma, se espera preservar la inversión en la rehabilitación y modernización de las carreteras principales y caminos secundarios; así como la priorización de los caminos de mayor importancia en carácter de producción. En este contexto, dentro de los componentes del convenio de crédito CR-3464-NI, se incorporó el componente de mantenimiento vial, que establece la ejecución de mantenimiento rutinario por medio de ME, y mantenimiento periódico bajo la administración del MTI y el FOMAV. El cumplimiento de este componente ha sido satisfactorio, y se ha logrado el apoyo de DANIDA, BCIE, BID, entre otros con el fin de dar continuidad a este sistema de conservación vial y el fortalecimiento del sistema de gestión de mantenimiento vial. Como parte de estos logros se pueden mencionar la aprobación a la reforma de la Ley 355 (Ley del Fondo de Mantenimiento Vial) y su reglamentación, en la que se garantizan los fondos para el mantenimiento vial a través de tarifas ligadas al combustible. Por otra parte, el Gobierno de Nicaragua continúa realizando esfuerzos en la asignación de recursos para el mantenimiento vial por medio del presupuesto de la Republica de Nicaragua; ya sea al MTI, IDR, e INIFOM. 5. Evaluación del Fortalecimiento de la Construcción Los resultados son satisfactorios, en términos de participación del sector privado en la ejecución de las obras de rehabilitación y mantenimiento de carreteras. Se ha adquirido experiencia en el manejo de contratos con reglas de la AIF del BM. Además, se ha adquirido conocimientos en el diseño de proyectos con fronteras en el monto de inversiones, tomando en cuenta la justificación técnica, ambiental y técnica; en las nuevas formas de ejecutar las obras, al utilizar reciclaje y la estabilización con cemento; y en la ejecución de los proyectos de adoquinado, etc. 6. Papel del Banco El papel de la AIF del BM ha sido muy satisfactorio, a través de la participación del

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task manager del proyecto, en lo relacionado con la formulación integral y bien estructurada del proyecto, la tarea de modernizar la red vial principal, las mejoras de la red vial rural, la participación en la formación del FOMAV, y el fortalecimiento de la institucionalidad del sector transporte para mejorar el servicio a otros sectores económicos y sociales. El Banco ha participado en más de veinticinco misiones de trabajo, incluyendo cuatro misiones de identificación y preparación del Tercer Proyecto de Rehabilitación y Mantenimiento de Carreteras, y 21 misiones de evaluación o supervisión desde el 05 de mayo de 2000 a mayo de 2006. Asimismo, dado el conocimiento del Banco en el sector transporte, el proyecto resulta consistente con las políticas establecidas en el Plan Nacional de Transporte (PNT) y en el Plan Nacional de Desarrollo (PND), así como con las metas del CAS, en términos de apoyar el crecimiento económico y social, la generación de empleo y disminuir los niveles de pobreza. Además, el Banco ha asistido a la UCP en mejorar las gestiones en términos de adquisiciones, administración financiera, el seguimiento a contratos, diseños de proyectos y costos en correspondencia con lo planeado y la implementación de las normas sociales en proyectos viales; ha participado activamente en la solución oportuna de situaciones que afectaron el proyecto, asignando especialistas para elaborar planes de trabajo alternativos o específicos; y participó en la realización del primer proyecto de impacto regional e internacional, a nivel de factibilidad ambiental (RESA) del Proyecto de Rehabilitación de Naciones Unidas – Bluefields, con la coordinación de DANIDA. 7. Papel del Prestatario El MTI, por medio de la UCP, ejecutó el proyecto satisfactoriamente. La UCP ha mantenido y usado un sistema integrado automatizado de administración de proyectos, el cual ha garantizado el registro de todas las operaciones financieras, contables, adquisiciones, desembolsos y seguimiento físico de los proyectos. Además, asignó los recursos de aporte local para ejecutar los proyectos y para gastos operativos de la UCP. Por otro lado, ha aplicado las normas de adquisiciones, financieras y de auditorías, de forma satisfactoria para la AIF del BM; implementó el proyecto con base al Manual de Operaciones y el Manual de Administración Financiera, realizó los diseños de los proyectos y las adquisiciones en plazos satisfactorios, así como la supervisión de los proyectos para garantizar la calidad y magnitud de sus obras. Asimismo, la UCP se ha fortalecido y mantenido buenas relaciones con el personal del Banco, ha cumplido con todas las normas y compromisos adquiridos. Además, el prestatario ha aportado recursos adicionales a lo establecido en el convenio de crédito para cubrir costos por imprevistos de precios en los combustibles y en algunos contratos de adoquinado y los impuestos locales. 8. Factores que Afectaron la Implementación y Resultados del Proyecto

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La elaboración de los diseños finales de ingeniería ajustándose a normativas internacionales demandó más recursos que los estimados en el PAD. Por ello, fue necesario incrementar los costos, o hacer ajustes, en la etapa de construcción, lo que demandó tiempo y la reducción de las asignaciones de montos en el PAD para no afectar las metas acordadas. La aplicación del Sistema Integrado de Gestión Administrativa y Auditoria (SIGFA) y de la Ley 550 de Administración Financiera introdujo normas y procedimientos adicionales a los acordados con la AIF del BM, lo cual alargó los tiempos para realizar pagos a contratistas.

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Annex 8. Comments of Cofinanciers and other Partners/Stakeholders The following comments were extracted from the results of the various surveys carried out by MTI along roads that were stabilized (adoquine) under the project. A. Improvement in standards of living and working conditions: safer and healthier roads in the Somoto-San Lucas section.

B. Reduction of vehicle maintenance costs and expanded transport services (Masaya-Las Flores sector)

Adoquine stabilization works have increased the possibilities of transit between the communities. This greater transit is due mainly to the reduction of the maintenance costs for the transport operators, who formerly did not go to those locations due to the problems with the rural roads. Javier Borges, from his Hyundai cab, assures that, as a member of the selective transportation service, he is very happy with this project, “Because in the past, it was impossible to use this road, and we could not even enter here, much less in a light vehicle such as mine....What’s more, the bus, the population’s only means of transportation, did not quite enter there because the drivers were afraid it would damage their units,” he recalls.

Standards of living in terms of health and working conditions for the local settlers who use this road section on a daily basis have been improved, since transiting the road now demands less time and effort.

The comings and goings through dusty and muddy roads will no longer be a nightmare for Julia Muñoz Ponce, a 75-year-old woman who travels long distances every day to sell her agricultural products from Santa Isabel community, some 5 kilometers away from the Somoto Municipality. For Ms. Muñoz, it was a great challenge to deliver the merchandise she sells in the Somoto market, because the road between Somoto municipality and San Lucas was terrible. Conditions were even worse during the winter, when “we only step on mud the whole journey, which made us get up at dawn so we could return early to our homes,” Ms. Muñoz recalls. Today, the 8.4-kilometer road between Somoto and San Lucas is completely changed and the population has a completely adoquine road. Ms. Muñoz and municipality officials are satisfied with the Rural Roads Stabilization Program (PEA). “This project is great; thank God and the MTI for this first-class road. It used to be dangerous, there were lots of wild spots and we were afraid. Now it is clear and we have a nice road to use,” Ms. Muñoz said.

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Lázaro Gaitán, a laborer from Los Llanos No.1 settlement, remembers that this road was terrible. “Imagine that we had to go through those wild and nasty places so we did not get stuck while the buses, which appeared once in a blue moon, got stuck in the muddy mires before this project began,” he said. Fátima Norinda, a student from Las Flores, says that the adoquine project is good, “because in the past it was horrible to go to classes, especially in the winter, when swamps covered everything with mud. Now everything is much easier and the buses come more often.”

C. Growth of market competition: MECO Santa Fe Company

Given the requirements for adoquine for the Third Road Rehabilitation and Maintenance Project, the MECO Santa Fe company kept its promise to provide supplies to this project. MECO Santa Fe had a plant capable of producing 1 million adoquine a month. In 2004, it opened a new plant with a production capacity of 2 million. This means it will produce 36 million adoquine per year, enough to pave some 300 kilometers of 6-meter-wide roads. Just like MECO, the list of investments has increased in the different companies dedicated to this sector. Engineer Leclair says that competition is positive, since this injects dynamism into the market, and he says that monopolies are “inconvenient from all points of view.”

D. Dynamics of trade of agricultural products in Susucayan-El Jícaro

Due to this roadwork, commercialization of agricultural products is more effective now. Today, a great number of traders buy crops from Susucayan farmers in their locations, which means that neither producers nor traders have to travel long, difficult journeys. Cesar Vásquez, a humble farmer from Susucayan, acknowledges that this adoquine paving project has brought great relief and an improvement in standards of living. “In the past, we had lots of difficulties in all senses with the road in such bad shape. In order to take our crops out it was very difficult and almost no vehicle passed through this area, no traders ever came here and we were forced to take our products all the way to El Jícaro,” he recalls.

E. Impact in the micro-finance sector (Nueva Segovia)

The lack of growth in the micro-finance sector in the productive municipalities of the

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country is well known. In the past they were “depressed” due to the lack of an appropriate road network. Hugo Fiallos, in charge of the project Multiple Services Cooperative of El Jícaro at the Municipality in Nueva Segovia, admits there is a real impact with the creation of paved road sectors in the municipality, since the financial records of the cooperative reflect a slight growth in the account statements. The official affirms that he has observed, since the execution of the paving project, that the amounts and number of loans have increased by 30 percent to 40 percent, and that the type of loans requested by the farmers are not only for crops but also for the purchase of vehicles.

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Annex 9. List of Supporting Documents 1. Project Concept Note, http://iris3.worldbank.org/iw/doc_view/viewer.jsp?DocID=000021716_00083110345600&IWINSTANCE=IW3P2. 2. Project Appraisal Document, http://iris3.worldbank.org/iw/doc_view/viewer.jsp?DocID=000023029_01013011562000&IWINSTANCE=IW3P2.

REGÍON AUTONOMISTAATLÁNTICO NORTE

REGÍON AUTONOMISTAATLÁNTICO SUR

JINOTEGANUEVA

SEGOVIA

MADRIZ

ESTELÍ

MATAGALPA

BOACO

CHINANDEGA

LEÓN

RÍO SANJUAN

CHONTALES

RIVAS

CARAZO

MANAGUA

GRANADAMASAYA

MANAGUA

OCTOCAL

SOMOTO

ESTELÍ

LÉON

JINOTEGA

CHINANDEGA

MATAGALPA

BOACO

JUIGALPA

JINOTEPE

RIVAS

GRANADA

MASAYA BLUEFIELDS

SAN CARLOS

PUERTO CABEZAS

Bilwaskarma

Raiti

Teotecacinte

Jalapa

Las Manos

SantaMaria

Murra

Palacaguina

Condego

SomotilloPotosi

Limay

La Vigía

El Tuma

Rio BlancoMatiguas

Sébaco

Telica

Chichigalpa

Monotombo

Izapa San Benito

Nandaime

AltagraciaMoyagalpa

Peñas Blancas

San Jacunti

El Sauce

Malpaisillo

Mina ElLimón

QuilaliTotogalpa

PuebloNuevo

San Pedro

Guasaule

Corinto

Poneloya

Salinas Grandes

Puerto Sandino

El Tránsito

Masachapa

Nancimí

Diriamba

La Boquito

El Astillero

San Juan del Sur

Rio Grande

PuertoMorazán

V. 15 Julio (Pte.Estero Real)

CiudadDarío

Bonanza

El Salto

SiunaSusucayam

San Juande Rio Coco

La Rosita

Limbaica

Makantaka

Nauawás

Camoapa

Comalapa

Morillo

San Miguelito

Morrito

San Ubaldo

Pto.Díaz

La GateadaAcoyapaLovago

MuhanSto. Tomas Villa SanFrancisco

EsquipulasS. José deLos Remates

Santa Lucía

Santo Domingo

La Libertad

Muy Muy

EL Rama

El Bluff

Punta Gorda

San Juan del Norte

Nueva Guinea

Salto Grande

San Pedrodel Norte

Puerto Isabel

Tuara

Tuapí

La Constancia

Waspam

H O N D U R A S

C O S TA R I C A

CayosMiskitosIslands

To SanSalvador

To SanSalvador

To SanJose

JANUARY 2001

San LorenzoBridgeManagua

Airport

PACIFICOCEAN

WaniLagoon

PaharaLagoon

BluefieldsBay

PuntaGorda

Bay

L.akeManagua

Lake

Nicaragua

Gulf ofFonseca C a r i b b e a n

S e a

PerlasLagoon

Karata Lagoon

WountaLagoon

Río

Bambana

Río Kurinwás

Río Grande de Matagalpa Río Tuma

Rí

o

Boca

y

Río Coco (Río Segovia

)

Río Wawa

Río Prinzapolca

Río Siquia

Río Mico Rio Escondido

Río San Juan

Rio Punta Gorda

83°84°85°86°87°

83°84°85°86°87°

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IBRD 31207

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KILOMETERS

60 80 100

PROJECT ROADS

PAN AMERICAN HIGHWAY

MAIN PAVED ROADS

ALL-WEATHER ROADS (GRAVEL)

DRY WEATHER ROADS

PRINCIPAL PORTS

OTHER PORTS

INTERNATIONAL AIRPORT

SECONDARY AIRPORTS

INLAND WATERWAYS

RIVERS

SELECTED TOWNS

DEPARTMENT CAPITALS

NATIONAL CAPITAL

DEPARTMENT BOUNDARIES

INTERNATIONAL BOUNDARIES

ALTITUDES IN METERS:

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

NICARAGUA

THIRD ROAD MAINTENANCEAND REHABILITATION PROJECT

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COSTA RICA PANAMA

COLOMBIA

BELIZE

HONDURAS

NICARAGUA

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